Creating a harmonious performance of a supply chain is an art. How fit is your supply chain? A balanced symphony can be achieved by a systematic approach towards supply chain design and control. A supply chain model is introduced to assess and design supply chains. A 4-step approach is proposed to effectively implement logistics excellence in the supply chain for an organisation.

1. Logistics Excellence:
Creating a harmonious performance
Dr. Marco Tieman
(CEO LBB International & Adjunct Professor Universiti Tun Abdul Razak)
Kuala Lumpur, 26 August 2014

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2
Agenda
Introduction
Organising your supply chain
How to get started
Conclusion

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Introduction

4. A harmonious performance ...
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5. Logistics Excellence is the art of a
conductor in front of the orchestra,
recognising the specific qualities of the
players in the orchestra (read: supply chain
partners) and knowing how to weld these
together into a harmonious performance.
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6. Using the specific qualities of the various
players, the conductor composes and
implements best practice solutions to
form a balanced symphony.
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7. Logistics excellence is reached when the
company has (1) short supply chain
lead-times, (2) low variation in the
supply chain, and (3) low waste in the
supply chain.
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8. How fit is your supply chain?
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9. Organising your supply chain
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© 2012 LBB International
Supply chain model

11. Supply chain strategy
Sourcing/Purchasing
Strategy
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Brand
Brand
Production & Distribution
Value/Commercial
Value/Commercial
Strategy
Strategy
Production & Distribution
Strategy
Strategy
Sourcing/Purchasing
Strategy

12. Supply chain objectives
 Customer service objectives (order cycle
time, inventory availability, order fill rate)
 Logistics objectives (reduce lead-times,
improve deliver reliability & flexibility, and
reduce integral supply chain costs)
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13. Product characteristics
Inventory
Transporta-tion
& Storage
1 10 100
10,000
1,000
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Handling
Value density
Packing density
100
Source: Goor et al. (1999)

14. Market requirements
What value we offer in the eyes of the customer…
 Taste
 Preferences (flowers): stalk/stem (short, long),
flower bud (open, closed)
 Halal: Muslim vs. non-Muslim country
 Packaging (colour, materials, portions) & labelling
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15. Logistics control
= Planning, coordinating and
conducting processes and activities
within a chain.
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16. www.lbbinternational.com Where is my Customer Order
Decoupling Point (CODP)?
Logistics control

17. Logistics control
 Customisation -> CODP upstream -> need for
fast, frequent and order driven delivery
 Floating stock -> CODP downstream -> pipeline
becomes virtual distribution centre
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CODP

18. Supply chain resources
 Culture
 Organisation structure &
interdependencies
 ICT = qualifier!
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19. Supply chain business processes
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Source: Lambert et al. (1998) 19

20. Supply chain network structure
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21. Supply chain peformance
 Efficiency (cost, profit, ROI)
 Effectiveness (brand, complaints,
waste)
 Flexibility (mix flexibility, volume
flexibility)
 Responsiveness (lead-time)
 Robust (rejects, availability
of assets)
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22. Organising your supply chain
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STRATEGIC
FIT!
© 2012 LBB International
ALIGNMENT! ALIGNMENT!

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How to get started

24. The FIRST STEP is to map the current
supply chain (AS-IS) for the organisation
and measure its performance, strategic
fit and degree of alignment.
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25. The SECOND STEP is to design the
future supply chain (TO-BE) for the
organisation with its targeted
performance.
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26. The THIRD STEP is to improve the
‘fitness’ of the organisation:
(1)identify quick wins -> motivation
(2)training of staff -> capabilities
(3)involve management -> endurance
(4)establish project teams ->
implementation power
(5)establish a conductor ->
coordination
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27. The FOURTH STEP is to implement
improvement programs, in order to (1)
shorten its supply chain lead-times, reduce
its variation and waste; (2) establish
strategic fit; and (3) ensure alignment with
its markets.
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Conclusion

29. Logistics excellence is the art of a conductor
in front of the orchestra, recognising the
specific qualities of the players in the
orchestra and knowing how to weld these
together into a harmonious performance.
Logistics excellence can be achieved by four
steps: (1) AS-IS analysis, (2) TO-BE design,
(3) improving the fitness of the organisation,
and (4) effective implementation.
For more information on logistics
excellence, please contact us!
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30. Thank you
LBB International
B-5-8 Plaza Mont Kiara
Mont Kiara
50480 Kuala Lumpur
Malaysia
Dr. Marco Tieman
Chief Executive Officer
marco@lbbinternational.com
www.lbbinternational.com
www.logisticsexcellence.blogspot.com